2016 (8) TMI 1335 - HC - VAT and Sales Tax

Recovery action initiated by the respondents - recovery of tax and penalty as assessed on the petitioner for the four years, viz., 2006-2007, 2008-2009, 2010- 2011 and 2011-2012 - Held that - the Assessing Officer cannot be blamed because the petitioner defaulted in producing the C-Forms - Now the petitioner has realised his mistake and has enclosed the C-Forms, which according to the petitioner covers 75% of the transaction. Therefore, before bringing the property of the petitioner for sale, the respondents should be directed to consider the petitioner s representation, dated 25.07.2016 filed under Section 84 of the TNVAT Act, 2006. Accordingly, there will be a direction to the 3rd respondent to consider the petitioner s representation, dated 25.07.2016, filed under Section 84 of the TNVAT Act, 2006, along with the C-Forms enclosed in the said representation, and appropriate orders of revised assessment shall be passed, on merits. Petition disposed off.

Summary

Issues:
Challenge to recovery action for tax and penalty assessed under the CST Act for multiple years.
Delay in submission of C-Forms leading to completion of assessments by the Assessing Officer.
Applicability of legal precedents regarding the submission of C-Forms.
Petitioner's representation under the TNVAT Act enclosing C-Forms.
Directions for revised assessment and payment of tax and penalty.

Analysis:
The petitioner, a registered dealer under the CST Act, challenged the recovery action initiated by the respondents for tax and penalty assessed for four years due to non-submission of C-Forms. The assessments were completed by the Assessing Officer because the petitioner failed to produce the required C-Forms, leading to the recovery proceedings. The petitioner admitted the mistake and filed a representation under the TNVAT Act enclosing C-Forms, claiming 75% submission. Legal arguments were made citing a Full Bench decision and a Circular emphasizing a liberal approach in dealing with belatedly submitted C-Forms.

The court acknowledged the settled legal position that a liberal approach should be taken when C-Forms are submitted late. However, in this case, the Assessing Officer's actions were justified due to the petitioner's failure to produce the C-Forms initially. The court noted that the petitioner's conduct limited the applicability of legal precedents supporting the submission of C-Forms after delay. Despite this, the petitioner rectified the mistake by submitting C-Forms covering 75% of the transactions, prompting the court to direct the Assessing Officer to consider the representation and C-Forms for revised assessment within two weeks.

As per the court's direction, the distraint proceedings were stayed until the revised assessment was completed, and the petitioner was required to pay the balance tax and penalty within three weeks of the revised assessment order. Failure to comply would allow the respondents to proceed with the recovery proceedings. The court disposed of the writ petition with these directions, emphasizing the importance of timely compliance with tax obligations to avoid further legal actions.

In conclusion, the judgment addressed the issues of delayed submission of C-Forms, the petitioner's rectification efforts, and the legal principles guiding such cases. The court provided a clear directive for revised assessment and payment, balancing the interests of the petitioner and tax authorities while upholding the importance of compliance with tax laws.